Thread: The Dollar’s Demise

Russia and China announce decoupling trade from Dollar
- The End for the USA is nigh‏
Peter Koenig - Global Research Tue, 08 Apr 2014 16:13 CDT

Russia has just dropped another bombshell, announcing not only the de-coupling of its trade from the dollar, but also that its hydrocarbon trade will in the future be carried out in rubles and local currencies of its trading partners - no longer in dollars - see Voice of Russia http://voiceofrussia.com/2014_04_04/...trodollar-2335

Russia's trade in hydrocarbons amounts to about a trillion dollars per year. Other countries, especially the BRICS and BRCIS-associates (BRICSA) may soon follow suit and join forces with Russia, abandoning the 'petro-dollar' as trading unit for oil and gas. This could amount to tens of trillions in loss for demand of petro-dollars per year (US GDP about 17 trillion dollars - December 2013) - leaving an important dent in the US economy would be an understatement.

Added to this is the declaration today by Russia's Press TV - China will re-open the old Silk Road as a new trading route linking Germany, Russia and China, allowing to connect and develop new markets along the road, especially in Central Asia, where this new project will bring economic and political stability, and in Western China provinces,where "New Areas" of development will be created. The first one will be the Lanzhou New Area in China's Northwestern Gansu Province, one of China's poorest regions.

"During his visit to Duisburg, Chinese President Xi Jinping made a master stroke of economic diplomacy that runs directly counter to the Washington neo-conservative faction's effort to bring a new confrontation between NATO and Russia." (press TV, April 6, 2014 http://www.presstv.ir/detail/2014/04...vert-cold-war/ )

"Using the role of Duisburg as the world's largest inland harbor, an historic transportation hub of Europe and of Germany's Ruhr steel industry center, he proposed that Germany and China cooperate on building a new "economic Silk Road" linking China and Europe. The implications for economic growth across Eurasia are staggering."

Curiously, western media have so far been oblivious to both events. It seems like a desire to extending the falsehood of our western illusion and arrogance - as long as the silence will bear.

Germany, the economic driver of Europe - the world's fourth largest economy (US$ 3.6 trillion GDP) - on the western end of the new trading axis, will be like a giant magnet, attracting other European trading partners of Germany's to the New Silk Road. What looks like a future gain for Russia and China, also bringing about security and stability, would be a lethal loss for Washington.

In addition, the BRICS are preparing to launch a new currency - composed by a basket of their local currencies - to be used for international trading, as well as for a new reserve currency, replacing the rather worthless debt ridden dollar - a welcome feat for the world.

Along with the new BRICS(A) currency will come a new international payment settlement system, replacing the SWIFT and IBAN exchanges, thereby breaking the hegemony of the infamous privately owned currency and gold manipulator, the Bank for International Settlement (BIS) in Basle, Switzerland - also called the central bank of all central banks.

To be sure - the BIS is a privately owned for profit institution, was created in the early 1930's, in the midst of the big economic melt-down of the 20th Century. The BIS was formed precisely for that purpose - to control the world's monetary system, along with the also privately owned FED and the Wall Street Banksters - the epitome of private unregulated ownership.

The BIS is known to hold at least half a dozen secret meetings per year, attended by the world's elite, deciding the fate of countries and entire populations. Their demise would be another welcome new development.

As the new trading road and monetary system will take hold, other countries and nations, so far in the claws of US dependence, will flock to the 'new system', gradually isolating Washington's military industrial economy (sic) and its NATO killing machine.

This Economic Sea Change may bring the empire to its knees, without spilling a drop of blood. An area of new hope for justice and more equality, a rebirth of sovereign states, may dawn and turn the spiral of darkness into a spiral of light.

http://www.sott.net/article/277104-R...-nigh%E2%80%8F

comments

The whole situation begs the question... Why has the US (or whoever the hell is in charge) pushed Russia into taking this action? Why did they force this decoupling of Russian transactions off of the dollar? Is it that Russia and China will be the patsies for the fall of the US economy or is there something more? Apparently the "clean natural gas" scam is going global, although that may just be a side note. Bet your bum they expected and wanted this reaction. Will Iran or Syria be targeted as soon as action starts taking place in the Ukraine. Something big is going down and I have the sneaking suspicion it is going down nearly exactly as planned.

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As good old what's-his-face (FDR) said, "Nothing in politics happens by accident. If it happens, you can bet it was planned that way."

Goodbye US dollar.

Hold on to your butts. It's gonna be a bumpy ride.

This link is a good primer to explain the background to what is going down: http://blog.redefininggod.com/2013/1...lling-you.aspx

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4 April, 14:34
Russia prepares to attack the petrodollar
The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.

The existence of "petrodollars" is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting. If a Japanese buyer wants to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.

Lately, China has led the BRICS efforts to dislodge the dollar from its position as the main global currency, but the "sanctions war" between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .

The main supporters of this plan are Sergey Glaziev, the economic aide of the Russian President and Igor Sechin, the CEO of Rosneft, the biggest Russian oil company and a close ally of Vladimir Putin. Both have been very vocal in their quest to replace the dollar with the Russian ruble. Now, several top Russian officials are pushing the plan forward.

First, it was the Minister of Economy, Alexei Ulyukaev who told Russia 24 news channel that the Russian energy companies must ditch the dollar. "They must be braver in signing contracts in rubles and the currencies of partner-countries," he said.

Then, on March 2, Andrei Kostin, the CEO of state-owned VTB bank, told the press that Gazprom, Rosneft and Rosoboronexport, state company specialized in weapon exports, can start trading in rubles. " I've spoken to Gazprom, to Rosneft and Rosoboronexport management and they don't mind switching their exports to rubles. They only need a mechanism to do that ", Kostin told the attendees of the annual Russian Bank Association meeting.

Judging by the statement made at the same meeting by Valentina Matviyenko, the speaker of Russia's upper house of parliament, it is safe to assume that no resources will be spared to create such a mechanism. " Some ‘hot headed' decision-makers have already forgotten that the global economic crisis of 2008 - which is still taking its toll on the world - started with a collapse of certain credit institutions in the US, Great Britain and other countries. This is why we believe that any hostile financial actions are a double-edged sword and even the slightest error will send the boomerang back to the aborigines," she said.

It seems that Moscow has decided who will be in charge of the "boomerang". Igor Sechin, the CEO of Rosneft, has been nominated to chair the board of directors of Saint-Petersburg Commodity Exchange, a specialized commodity exchange. In October 2013, speaking at the World Energy Congress in Korea, Sechin called for a "global mechanism to trade natural gas" and went on suggesting that " it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies ". Now, one of the most influential leaders of the global energy trading community has the perfect instrument to make this plan a reality. A Russian commodity exchange where reference prices for Russian oil and natural gas will be set in rubles instead of dollars will be a strong blow to the petrodollar.

Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a "jumbo deal" with Indian companies. In both deals, there are no US dollars involved. Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market. The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar. If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the "petroruble" and will hurt the petrodollar.

It can be said that the US sanctions have opened a Pandora's box of troubles for the American currency. The Russian retaliation will surely be unpleasant for Washington, but what happens if other oil producers and consumers decide to follow the example set by Russia? During the last month, China opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt. Are the Chinese preparing a similar move against the greenback? We'll soon find out.

http://voiceofrussia.com/2014_04_04/...rodollar-2335/

Isn't it amazing how fast things are moving? Russia and China's plans for trade deals had to be worked out years ago and just needed a catalyst. The US dollar may be on the cusp of a slow collapse followed by a rout. Inflation will pick up as the chickens (and $) come home to roost. TPTB will panic the US into an ill advised world war for the bankers benefit. There will be anti-war protests and prices of essentials will rise and business will slow and unemployment will increase although government statistics will continue to claim, "All is good". Then there will be an announcement of Martial Law and mid term elections will be cancelled. This could seed a revolution which may be over quickly if "The Generals" take over in defense of The Constitution. I see trials and rolling heads so there is a lot at stake here.

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The Fed, Henry Kissinger, George Soros and their mafia gangster friends surely are angry with this latest development. They are Elitists, very smart people. Surely, they should foresee the collapsed of the USD, even expected it to happen. They will instigate a world war to cover their backside. No investigation on their crime since all files will be destroyed (like in files in NY twin towers & Tower 7 were destroyed). While the world goes to war, they will take shelter in their underground bunkers/tunnels. However, they will not be safe in their bunkers. Putin will go after them, make their bunkers their permanent home.

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The MSM in the US is avoiding this story now. Its best not to worry the serfs.This deal will and several others in the 'pipeline' will rock inflationary boats across the world.

US Threatens Russia Over Petrodollar-Busting Deal
by Tyler Durden on 04/05/2014

On the heels of Russia's potential "holy grail" gas deal with China, the news of a Russia-Iran oil "barter" deal, it appears the US is starting to get very concerned about its almighty Petrodollar

•*U.S. HAS WARNED RUSSIA, IRAN AGAINST POSSIBLE OIL BARTER DEAL

•*U.S. SAYS ANY SUCH DEAL WOULD TRIGGER SANCTIONS

•*U.S. HAS CONVEYED CONCERNS TO IRANIAN GOVT THROUGH ALL CHANNELS

We suspect these sanctions would have more teeth than some travel bans, but, as we noted previously, it is just as likely to be another epic geopolitical debacle resulting from what was originally intended to be a demonstration of strength and instead is rapidly turning out into a terminal confirmation of weakness.

As we explained earlier in the week,

[/Russia seems perfectly happy to telegraph that it is just as willing to use barter (and "heaven forbid" gold) and shortly other "regional" currencies, as it is to use the US Dollar, hardly the intended outcome of the western blocakde, which appears to have just backfired and further impacted the untouchable status of the Petrodollar.

...

"If Washington can't stop this deal, it could serve as a signal to other countries that the United States won't risk major diplomatic disputes at the expense of the sanctions regime,"

And here is Voice of Russia, "Russia prepares to attack the Petrodollar":

The US dollar's position as the base currency for global energy trading gives the US a number of unfair advantages. It seems that Moscow is ready to take those advantages away.



The existence of “petrodollars” is one of the pillars of America's economic might because it creates a significant external demand for American currency, allowing the US to accumulate enormous debts without defaulting. If a Japanese buyer want to buy a barrel of Saudi oil, he has to pay in dollars even if no American oil company ever touches the said barrel. Dollar has held a dominant position in global trading for such a long time that even Gazprom's natural gas contracts for Europe are priced and paid for in US dollars. Until recently, a significant part of EU-China trade had been priced in dollars.



Lately, China has led the BRICS efforts to dislodge the dollar from its position as the main global currency, but the “sanctions war” between Washington and Moscow gave an impetus to the long-awaited scheme to launch the petroruble and switch all Russian energy exports away from the US currency .



The main supporters of this plan are Sergey Glaziev, the economic aide of the Russian President and Igor Sechin, the CEO of Rosneft, the biggest Russian oil company and a close ally of Vladimir Putin. Both have been very vocal in their quest to replace the dollar with the Russian ruble. Now, several top Russian officials are pushing the plan forward.



First, it was the Minister of Economy, Alexei Ulyukaev who told Russia 24 news channel that the Russian energy companies must should ditch the dollar. “ They must be braver in signing contracts in rubles and the currencies of partner-countries, ” he said.



Then, on March 2, Andrei Kostin, the CEO of state-owned VTB bank, told the press that Gazprom, Rosneft and Rosoboronexport, state company specialized in weapon exports, can start trading in rubles. “ I've spoken to Gazprom, to Rosneft and Rosoboronexport management and they don't mind switching their exports to rubles. They only need a mechanism to do that ”, Kostin told the attendees of the annual Russian Bank Association meeting.



Judging by the statement made at the same meeting by Valentina Matviyenko, the speaker of Russia's upper house of parliament, it is safe to assume that no resources will be spared to create such a mechanism. “ Some ‘hot headed' decision-makers have already forgotten that the global economic crisis of 2008 - which is still taking its toll on the world - started with a collapse of certain credit institutions in the US, Great Britain and other countries. This is why we believe that any hostile financial actions are a double-edged sword and even the slightest error will send the boomerang back to the aborigines,” she said.



It seems that Moscow has decided who will be in charge of the “boomerang”. Igor Sechin, the CEO of Rosneft, has been nominated to chair the board of directors of Saint-Petersburg Commodity Exchange, a specialized commodity exchange. In October 2013, speaking at the World Energy Congress in Korea, Sechin called for a "global mechanism to trade natural gas" and went on suggesting that " it was advisable to create an international exchange for the participating countries, where transactions could be registered with the use of regional currencies ". Now, one of the most influential leaders of the global energy trading community has the perfect instrument to make this plan a reality. A Russian commodity exchange where reference prices for Russian oil and natural gas will be set in rubles instead of dollars will be a strong blow to the petrodollar.



Rosneft has recently signed a series of big contracts for oil exports to China and is close to signing a “jumbo deal” with Indian companies. In both deals, there are no US dollars involved. Reuters reports, that Russia is close to entering a goods-for-oil swap transaction with Iran that will give Rosneft around 500,000 barrels of Iranian oil per day to sell in the global market. The White House and the russophobes in the Senate are livid and are trying to block the transaction because it opens up some very serious and nasty scenarios for the petrodollar. If Sechin decides to sell this Iranian oil for rubles, through a Russian exchange, such move will boost the chances of the “petroruble” and will hurt the petrodollar.



It can be said that the US sanctions have opened a Pandora's box of troubles for the American currency. The Russian retaliation will surely be unpleasant for Washington, but what happens if other oil producers and consumers decide to follow the example set by Russia? During the last month, China opened two centers to process yuan-denominated trade flows, one in London and one in Frankfurt. Are the Chinese preparing a similar move against the greenback? We'll soon find out.

http://www.zerohedge.com/news/2014-0...r-busting-deal

Finally, those curious what may happen next, only not to Iran but to Russia, are encouraged to read "From Petrodollar To Petrogold: The US Is Now Trying To Cut Off Iran's Access To Gold." http://www.zerohedge.com/news/2013-0...ns-access-gold